Instant fines for incorrect benefit claims

Published on Thursday, 16 June 2011 15:56
Posted by Scott Buckler

New figures released today show customer error is now costing the taxpayer more than fraud or official error (June 16th)

Lord Freud, the Minister for Welfare Reform, has announced that people who negligently give incorrect information on their claim or who don’t tell the Department quickly about a change in their circumstances will face a new civil penalty.

The latest fraud and error statistics show £3.4 billion was lost to fraud and error in the benefits system between October 2009 – September 2010.

* £1.3 billion has been lost to customer error
* £1.2 billion has been lost to fraud
* £0.9 billion has been lost to official error

The penalty will encourage people to be more responsible in keeping their claims correct. In the future, claimants on out of work benefits will also have to sign a commitment which will set out their obligations and responsibilities.

Lord Freud, Welfare Reform Minister said:

It is not acceptable for people to negligently give us incorrect information or have no reasonable excuse for not telling us when their circumstances change.

“In addition to the new penalty, Universal Credit will simplify and automate the benefits system to make it less open to abuse and ensure money is going to those who need it the most.”

This new measure is set out alongside the fraud and error strategy announced at the end of last year by DWP and HMRC that will reduce annual welfare fraud and error overpayments by one quarter (£1.4 billion) by March 2015 through:

* Launching a single fraud investigation service
* Accessing more data and using private sector analytical techniques
* Increased asset seizure
* New tougher one-strike, two-strike and three-strike rules, including three years for people with multiple convictions
* Money owed deducted directly through PAYE
* Case-cleaning over 1 million claims to remove official or customer error

Universal Credit, which will replace income-related support from 2013, will simplify the benefit system making it even harder for fraud and error to enter and making the benefit system far easier to administer.


Source: DWP

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